Saltus v. Genin

By the Court.

—This case comes before us upon an appeal from a judgment at Special Term in favor of the plaintiff for $1,755, with interest and costs.

The case was tried by the Judge who heard it without a jury, but it does not appear that it was so tried by the consent of the parties.

In order that the conclusions to which we have come may be properly understood, it will be necessary to give a brief statement of the pleadings, and of those portions of the findings and decision of the Judge, and of the evidence upon the trial that have a bearing upon the questions upon which alone our decision will turn.

The complaint alleges that upon the 11th day of January, 1856, the plaintiff gave to the defendants, who are j>artners and stock-brokers, an order to purchase for him two hundred shares of the capital stock of the Accessory Transit Company, and at the same time deposited with them, as a security for his own performance of the contract, thirty-five shares of the stock of the Sixth Avenue Railroad Company, with a power of attorney to transfer the same; that shortly thereafter, the defendants delivered to the plaintiff two memoranda, showing that they had purchased on his account from different persons, 200 shares ■of the stock of the Nicaragua Accessory Transit Company, the

The complaint then averred that the purchases and sales of the Nicaragua stock in the account rendered were not real but fictitious, and that the commission therein charged for negotiating a loan was also fictitious, and it closed with a demand of judgment by the plaintiff that the defendants should return and transfer to him the thirty-five shares of stock of the Sixth Avenue Railroad Company, -and should pay to him any balance that might be found due to him upon the transactions between them.

The answer of the defendants Grenin and A. Lockwood admitted the order for the purchase of the shares of the Accessory Transit Company, as given to the firm of Grenin & Lockwood, and the deposit with them of thirty-five shares of the Sixth Avenue Railroad Company, as a security, and averred that by agreement between the plaintiff and them, the Nicaragua shares were purchased and held by the firm in their own name. It averred that the purchase was in fact made, and the shares purchased so held by them, and that the subsequent sales both of the Nicaragua and of the Sixth Avenue Railroad Company shares were authorized and ordered by the plaintiff to be made on his

What are the issues, and in our judgment the only issues, raised by these pleadings, we shall hereafter state.

It was clearly proved upon the trial that the two hundred shares of Kicaragua stock were purchased by the defendants at the time, and for the price mentioned in the account which they rendered, and that they advanced the funds for that purpose. That they carried the stock, by which, it seems, is meant that they provided funds or credit for its payment, for the period of ninety days from the date of the purchase, and that by so doing the credit which it was originally agreed should be allowed to the plaintiff, as the purchaser, was extended sixty days; that at the end of the ninety days they sold the stock for the price mentioned in the account, and that the plaintiff had full notice of the sale and its result. And that with this knowledge he himself ordered the sale of the thirty-five shares of the Sixth Avenue Railroad stock, at the price that was obtained for it; and finally, that after the account of the defendants had been rendered to him, and with the account in his hands, he, in express words, admitted that the charges which it contained were correct, with the single exception of the charge of $150, as a commission for negotiating a loan.

All the facts above stated are substantially found by the Judge, but he finds these facts in addition: That on the 13th day of March, 1856, the defendants had no stock standing to their credit on the books of the Kicaragua Transit Company, but that on that day, and at all times from the 9th of January to the 11th of April, when the sale was made, they had an amount of stock equal to 200 shares deposited with other parties from whom they had borrowed money upon the security of the stock, and redeemable upon the payment of such loans, and that upon the 13th of March the average price of the stock was 20£ per cent.

The learned Judge states the law applicable to these facts to be, that the defendants were bound to have kept in their name upon the books of the company, or to have within their power, or in their possession during the period of the agreement, the

The sum of $1,755 is the difference between the market value of the two hundred shares on the 13th of March, and the sum for which, as the proceeds of their sale, the plaintiff was credited in the account rendered to him by the defendants on the 11th of April. The judgment therefore manifestly proceeds upon the ground that on the 13th of March the stock belonged to the plaintiff, and that the defendants, by parting with its possession on that day, unlawfully converted the same to their own use, and rendered themselves liable to him as owner.

The counsel for the defendants filed sixteen exceptions to the decision of the Judge, but there are only two of these that we shall notice, as they distinctly raise the only question that we propose to consider and determine.

The first of these exceptions is to so much of the decision of the Court as declares that the plaintiff was not bound by his admission that the account was correct, except as to the $150; and the second is to the whole decision, upon the ground that no action could be maintained upon the pleadings for the conversion by the defendants of the Nicaragua stock to their own use; and the questions that arise upon those exceptions, in the order in which we shall consider them, are:

First Whether, considering the nature of the action and of the relief sought, it was within the power, and, indeed, the jurisdiction of the Court to order the judgment appealed from ? and

I. The only cause of action alleged in the complaint is that the purchase and sale of the Nicaragua stock, as stated in the account of the defendants, were pretended and fictitious, and the relief demanded is exactly that to which upon proof pf these allegations the plaintiff would be entitled, namely, the return and transfer to him of the thirty-five railroad shares which he had deposited with the defendants as a collateral security. The- cause of action for which the judgment was rendered is, that the plaintiff was the lawful owner of the Nicaragua shares which he had ordered to be purchased, and that the defendants unlawfully converted the same to their own use. It is impossible to say that the difference between these causes of action can be regarded as an immaterial variance which the Court was at liberty to disregard, or even as a variance, which, under any possible construction of the provisions of the Code, might be- cured by an amendment. It is evident that the cause of action for which-the plaintiff was permitted to recover, not only differed in its entire scope and meaning from that stated in the complaint (Code, § 171), but directly contradicted all the allegations in the complaint upon which the demand for relief was founded. The complaint avers that the Nicaragua shares ordered by the plaintiff were never purchased by the defendants. The Judge decided, and his judgment necessarily implies, that the purchase was made by them in conformity to his order. The complaint denies that any moneys were advanced by the defendants on the plaintiff’s account. The Judge decided, and his judgment implies, that they advanced the whole sum which they charged as the purchase money of the stock. The complaint denies that any loans were negotiated .by the defendants for the plaintiff. The Judge decided that such loans were negotiated, and this also- his. judgment. implies, since otherwise the $150 which he

If it be said that when an answer is interposed, the Court, under section 275 of the Code, may grant to the plaintiff a relief different from that demanded by his complaint; the section itself gives the reply by declaring that the relief so granted must be “consistent with the case made by the complaint, and embraced within the issue.” As the facts upon which the Court below founded its decision were proved upon the trial, it has been alleged that the Court, by virtue of the powers given by section 173 of the Code, might order the pleadings, both complaint and answer, to be so amended as to conform them to the facts proved. Whether sitting as an Appellate Court, we have any power to direct such an amendment is a question it is unnecessary to discuss, since it so happens that the words of the section again furnish a conclusive reply to the argument. They furnish that reply by limiting the exercise of the discretionary power of the Court to cases in which the amendment “ does not change substantially the claim or defense.” The change that would here be made by such an amendment of the pleadings as would be requisite to sustain the judgment would not merely be substantial but absolute and entire.

We are not aware that there are any other provisions in the Code that may possibly be thought to have a bearing upon the

Again, even upon the supposition that the facts proved, upon the trial entitled the plaintiff to a recovery of the sum for which the judgment was rendered, and that such a recovery might be had even under the pleadings as they stand, still when it was rendered certain by the proofs that this was the only relief to which the plaintiff could be entitled, it seems to us very doubtful whether the jurisdiction of a Judge sitting without a jury, in a case in which a trial by jury had not been waived in the mode provided by the Code, did not cease, so that his power to render a judgment, unless by the express consent of the parties, was at an end. The suit in its nature and from the frame of the complaint was plainly an equity suit, and as such was properly triable by the Court alone, and such was evidently the understanding of the counsel and the Court, but the decision of the Judge turned this equity suit into an action at law for the recovery of money only, which, unless by the consent of the parties, could only be tried by a jury. His decision turned it into an action to recover damages for the wrongful conversion of personal property; and unless such an action may be tried by a Judge at Special Term, in the mere exercise of his own will, without a jury, the objection to the present judgment, as showing upon the face of the.record an excess of jurisdiction, seems unanswerable. (Code, §§ 253, 254, 266.)

It is not, however, upon this view of the case that we mean to place our decision, since we wholly reject the supposition that, even had a trial by jury been expressly waived, the judgment appealed from could have been rendered under the pleadings and in total disregard of the issues which the pleadings raise. It is upon this ground that we hold that the judgment must be reversed and a new trial be granted.

II. Placing our decision upon this ground, it is unnecessary to discuss at large the second question, namely, whether the proceedings of the defendants in relation to the stocks were not so fully sanctioned by the plaintiff as to preclude him from disputing their legality. Without dwelling upon all the reasons that have satisfied our minds that the defendants acted throughout by his express or implied authority, we shall content ourselves